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The Big Data wrangling CIO you've probably never heard of: But his kit probably knows YOU

The sprawling retail web estate handling 5m views per hour

Shop Direct is a £1.7bn group that owns some of the best-known brands in retail - firms that pioneered what the cutting edge of shopping.

Among the names it holds are Kays and Littlewoods, household brands that actually first pushed the idea of shopping without leaving your home to the UK using paper catalogues, home delivery and ordering over the phone.

You can still get one of their signature catalogues today – just. Shop Direct produced 40 million books in 2009 – but that number’s been chopped to 1.5m.

Today just 20 per cent of business is done on dead or recycled trees versus 80 per cent online. Driving online sales are the so-hip-they hurt Very.co.uk and ISME, launched in 2009 and 2011 respectively.

But at Shop Direct, even the traditional notion of the website is being changed: with 44 per cent of online sales via mobile, Shop Direct has rolled out native apps for iOS and Android. Next year, it throws up the group’s first stand-alone retail site tailored to a specific demographic – women aged 26 to 35 interested in designer brands.

"We are a digital business,” Shop Direct’s CIO Andy Wolfe told the Register during a recent interview.

“We fundamentally believe technology, and use of tech that better engages the customer, will yield huge investments for us.”

Sure, everybody is “going digital” but for all that change, the spirit of Littlewoods and Kays still seems to be behind the changes.

Wolfe says he’s now spending a substantial amount on big data and “experience”.

Why? Because, unlike those gentler days of the 20th century when Kays and Littlewoods were changing things, the competition today is harder.

Not just the other online retail suspects in the UK but also clicks-and-mortar types eating up digital retailing - like Arcadia Group (owner of Top Shop), M&S, Argos, John Lewis and aggressive Euro-invaders H&M. I didn’t even mention Amazon. There, I just did.

So committed is the board, that Wolfe reckons Shop Direct’s chiefs have allocated money to the digital initiatives above and beyond the annual IT budget.

He didn’t say how much in either case.

Andy Wolfe

Wolfe: ring fenced IT spending for the future

“A lot of retailers spend lots of money keeping the lights on. We have ring fenced budget,” Wolfe said, “and a significant percentage of investment goes into the future.”

Shop Direct has a history of big IT spend. In 2012 the Barclay brothers, who own Shop Direct – one of the UK’s largest privately held firms - blamed the investment in the web for causing a £46m annual loss.

The Barclays, for fans of retail history, bought what was Littlewoods' Shop Direct in 2002 for £750m. They sold the stores and rebranded in 2005 as Littlewoods Shop Direct Group and the then rebranded again as Shop Direct Group two years later.

The Barclays said they were “confident” the spending would pay off. It seems they were right: Shop Direct last month reported profits up by 40 per cent to £40.4m (pre-tax) for the year. It cited investments in web and m-commerce. Very.co.uk delivered 23 per cent of growth, making it the group’s biggest brand with £700m in sales.

In a virtual retail operation like Shop Direct, data is the firm’s rawest material and it's this that Wolf plans on mining to drive web and mobile growth next year and beyond.

“Ninety-five per cent of what we sell is sold on data,” Wolf said. “We are trying to work with the retail and financial data and trying to analyse and see what decisions we should take and what we should offer the customer, through promotions or service calls related to their account.

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